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After housing crash, Boulder developer Jim Chanin begins to rebuild

By Alicia Wallace, Camera Business Writer

Posted:
07/13/2014 02:30:00 PM MDT

Updated:
07/14/2014 10:02:22 AM MDT

Guadalupe Reyes, left, Eric Hobbs, and Sean Edwards put in a large window on a new home on Balsam Drive in Boulder. After going bankrupt because of the recession, Jim Chanin has spent the past three years getting back on his feet — personally and professionally —- and now has relaunched Chanin Development Inc. with a few small-scale projects including single-family homes in Boulder. (Cliff Grassmick / Daily Camera)

When Boulder rezoned a stretch of the 28th Street corridor at the city's southern entrance, local developer Jim Chanin jumped on an opportunity.

In 2005, his Chanin Development Inc. snapped up two motels along the 28th Street Frontage Road south of Colorado Avenue, paying $7.9 million for the properties that were home to the Lazy L Motel, 1000 28th St., and the New West Inn, 970 28th St.

Chanin Development then reached an agreement with the First Christian Church, a 46-year-old house of worship with an angular stained-glass sanctuary, which was sandwiched between the two motels.

Chanin's vision was to transform the three sites into Landmark Lofts, a 7.5-acre high-density residential development. His company and partners started the first phase — 103 condominiums in four, four-story buildings — but then the bottom fell out.

During the recession and real estate collapse, Landmark Lofts' units were selling, but not fast enough to meet the demands of the banks.

The limited liability company behind the development defaulted on a $25 million loan in 2009, and two years later Chanin Development filed for Chapter 7 bankruptcy protection.

It's been nearly 10 years since Chanin's company moved forward on Landmark Lofts and the project finally is coming to fruition — albeit in a slightly different form.

Landmark Lofts did not extend through the former First Christian Church property. The Province, an unrelated student housing development, was built on the site of the former church.

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And after being in a holding pattern for several years, building permits recently were pulled for Landmark Lofts' second phase — a 138-unit apartment complex in five, four-story buildings at 970 28th St. The project is under construction and is expected to open next summer.

Landmark Lofts was a vision of Chanin's, but it's no longer his development. The project now is led by Los Angeles-based CIM Group.

Chanin Development lost Landmark Lofts and other holdings during the bankruptcy, which was discharged in 2012.

Developer Jim Chanin stands in one of the single-family homes he is building on Balsam Drive in Boulder. (Cliff Grassmick / Daily Camera)

"I lost everything," he said. "It was a rough time. You never think something that severe is going to happen."

In addition to losing his house, Chanin and his wife divorced and she moved from Boulder. He became the primary parent to twins, a boy and girl who were 5 at the time.

"It took a good 6 months to a year to get myself and my kids on a stable footing and my head in a space where I could start building," he said.

The floor dropped from underneath Chanin both professionally and personally. The fall took him full circle.

After emerging from bankruptcy, Chanin eventually relaunched Chanin Development Inc., which has started out building custom single-family homes.

"That's where I had to start again, which is exactly where I started in the beginning and what I was most passionate about," he said.

Chanin started in the development business in 1987 by banging nails and framing for a homebuilder. He ventured out on his own five years later, and the business grew from there.

This restart hasn't been easy.

He said his wife moved out the same week he filed for bankruptcy, and after his house went into foreclosure, he had two weeks to find an apartment for him and his children.

Once settled, Chanin wanted to get back to work.

"There was nothing going on in the development world," Chanin said. "In fact, at the time, the entire species of developers had become extinct."

Eyeing custom home-builds, Chanin landed his first contract thanks to a local broker who put him in touch with a family seeking a home in the Chautauqua area.

"I'm three years out of my bankruptcy and the industry didn't really exist for those three years," Chanin said. "I just kind of put my head down, did some building to try to put bread on the table to feed my family.

"I could've cratered, but I didn't."

The building industry has rebounded some since the crash and Colorado — which took a deeper hit than other states — is enjoying a recovery that is outpacing the national average, said Michael Neal, senior economist for the National Association of Home Builders.

Scottie Quebedeaux works on a house on Balsam Drive in Boulder. After going bankrupt because of the recession, Jim Chanin has spent the past three years getting back on his feet — personally and professionally — and now has relaunched Chanin Development Inc. with a few small-scale projects including single-family homes in Boulder. (Cliff Grassmick / Daily Camera)

In 2009, there were 9,355 single-family and multifamily permits issued in Colorado, representing 20 percent of the state's 2004 levels, according to National Association of Home Builders.

Nationally, permits in 2009 were at about 28 percent of the amount recorded in 2004, Neal said.

Building has picked up in the following years and the state closed out 2013 with 27,517 permits. The Boulder metropolitan statistical area's permits have surpassed their pre-recession highs.

Builders' confidence levels also have improved. Citing an annual index surveying members' expectations and observations of the industry, Neal said the index had a reading of 57 at the end of the fourth quarter last year.

In the height of the downturn, amid the stoppages of work and the casualties of development firms, the index had a reading of 8.

Chanin's business has benefitted from the turnaround.

His firm is working on two single-family homes on Boulder's Balsam Drive, he's serving as a consultant for the Superior Town Center in addition to planning a development in conjunction with those plans, and he recently was awarded a contract for Louisville-based Real Capital Solutions' six-lot residential development planned for 302 Maple St. in Superior.

Tim Fredregill, analyst at Real Capital Solutions, said Chanin's abilities fit well the company's business model and its plans for a pocket neighborhood.

Additionally, Real Capital Solutions has sought out partnering with experienced builders who were heavily affected by the downturn, Fredregill said.

"They just got crushed financially, but their skillsets are still there," he said. "We're teaming up with people who have great experience and track records, but have some scar tissues.

"It's made them into better builders and developers; it's seen as not necessarily a red mark against them, but it's actually somewhat beneficial because they know what to look out for."

Construction on the 0.96-acre Superior project likely will start in October, he said.

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